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After dominating equity markets over the past two years, Nvidia (NVDA) shares have been under pressure in recent months. Investors and analysts are worried about the chip stock’s steep valuations, slowing revenue and earnings growth, the ongoing trade war, and a challenging macro environment. Currently, Nvidia stock is down 23% from all-time highs, valuing the company at a market cap of $2.86 trillion.
Investment bank Goldman Sachs (GS) has firmly positioned itself in the "it's so over" camp regarding the AI trade, releasing several bearish notes as Nvidia dropped as much as 7% earlier this week. The bank's strategists believe the mega-cap U.S. tech trade celebration has concluded.
According to Goldman Sachs, a deceleration in earnings growth for Big Tech companies, the failure to respond positively to good earnings news, and the potential for further valuation compression are all near-term headwinds for the Magnificent Seven companies.
A report from Robinhood stated that Goldman's Paolo Schiavone declared, "The AI theme is for sale," noting investors are increasingly concerned about 2026 growth rather than 2025 performance. Strategist Tony Pasquariello highlighted how the "immense earning premium" for U.S. mega-cap tech is narrowing, with DeepSeek triggering capital outflows from domestic tech plays.
Analyst John Flood reported February's notional de-grossing in U.S. technology, media, and telecom stocks is tracking to be the second largest in their records, while Goldman's Mark Wilson suggested large-cap tech stocks like Nvidia, Apple (AAPL), and Amazon (AMZN) may consolidate after significant price and multiple expansion.
Is Nvidia Stock a Good Buy Right Now?
NVIDIA recently reported strong financial results for the fourth quarter and fiscal year 2025 (which ended in January), showcasing its dominant position in AI computing. Fourth-quarter revenue reached a record $39.3 billion, up 78% year-over-year and 12% sequentially, while full-year revenue soared to $130.5 billion, representing a 114% increase from the previous year.
The Data Center segment remains NVIDIA's primary growth engine, generating $115.2 billion in fiscal 2025 revenue—a staggering 142% year-over-year increase. Fourth-quarter Data Center revenue climbed 93% from a year ago, driven by unprecedented demand for accelerated computing platforms used in large language models, recommendation engines, and generative AI applications.
"Demand for Blackwell is amazing as reasoning AI adds another scaling law—increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter," said Jensen Huang, founder and CEO of NVIDIA. The Blackwell architecture achieved $11 billion in revenue during its first quarter of availability, representing the fastest product ramp in the company's history.
Gaming segment revenue grew 9% for the full year but declined 11% year-over-year in Q4 due to supply constraints affecting both Blackwell and Ada GPUs. Professional Visualization revenue increased 21% for the year and 10% in Q4, while Automotive revenue surged 55% annually and 103% in the fourth quarter, primarily from self-driving platforms.
Nvidia Continues to Grow
For the first quarter of fiscal 2026, NVIDIA expects revenue of approximately $43 billion, with gross margins projected at around 71%. Its cash position strengthened to $43.2 billion, up from $26 billion a year ago, enabling $34.5 billion in shareholder returns during fiscal 2025, including $33.7 billion in share repurchases.
NVIDIA's outlook remains exceptionally strong as it continues advancing its technology leadership across data centers, cloud service providers, and emerging AI applications. With major partnerships including Amazon's AWS, Google Cloud (GOOG) (GOOG), Microsoft Azure (MSFT), Toyota (TM), and Hyundai, NVIDIA is positioned at the center of the global AI revolution as companies race to deploy increasingly sophisticated AI models and applications.
Out of the 44 analysts covering Nvidia stock, 38 recommend “Strong Buy”, two recommend “Moderate Buy” and four recommend “Hold”. The average target price for NVDA stock is $177.59, indicating an upside potential of 51.4% from current levels.
